Dubai: UAE based stock market investors love Tesla and Apple as much as their global peers. The electric car maker and the tech giant shared the top spot as UAE investors’ favoured picks this year, followed by Microsoft and Amazon.
In comparison, Gulf investors were more traditional in their choice of most traded global stock – Boeing. But the aircraft maker was followed by tech, in the form of Facebook, Zoom and Alibaba, according to findings from Saxo Bank.
Buying into Tesla would have helped UAE investors quite a bit - “2020 will also be remembered for the rise of Tesla as its market value surged 646 per cent, reaching a market value of $590 billion and ending the year as the biggest stock inclusion in the history of the S&P 500 Index,” said Peter Garnry, Head of Equity Strategy at Saxo Bank.
“Part of the Tesla story was the increase in EV sales globally despite the pandemic and the rise of “green transformation” stocks highlighting a powerful new theme in financial markets.”
Tech and Tesla rule
Saxo’s numbers are based on investment trends that it spotted among its clients in the UAE and from elsewhere. COVID-19 upended just about every other sector, but tech was one that made full use of the disruptions set off by the virus.
No surprises then that US tech companies “attracted the highest trading volumes” and which was reflected in the Nasdaq-100 being up more than 40 per cent for 2020.
Here is why these stocks delivered big time in 2020, according to Garnry:
Many analysts thought Tesla peaked back in the beginning of February. However, this was only the beginning of what would be an extraordinary year for Elon Musk. While a 646 per cent increase brings the company into bubbly territory, a new climate-friendly Biden administration could mean that there is more in store for the king of EVs.
Apple started on the wrong foot but made a swift recovery in the first months of the year, and it takes more than a pandemic to keep customers from acquiring the latest gadgets, as the latest iPhone 12 appears to be one of the top-sellers in the company’s history.
The strategic shift towards cloud-based services has paid off. If the work-from-home trend grows as expected, Microsoft will be a key facilitator for years to come. This is also highlighted in the stock, which gained 33 per cent in 2020.
While many physical stores hit a brick wall, Jeff Bezos’ everything store did not skip a beat and hired 175,000 people to accommodate the boom in online orders. However, regulators around the globe are setting up roadblocks, which could mean trouble in 2021.
Electric it is
Interestingly, Tesla was not the oly EV stock favoured by Gulf investors. China's Nio was another to see its shares being sought after.
"While Tesla is trying to gain a foothold in China, Nio is already there," the Saxo official added. "2020 put a spotlight on the Chinese EV company, which rose astronomically 1069 per cent during the year. While Musk makes the headlines, Nio benefits from the tailwind.
"Next step is punching their way into the European market."